Google Files First Debt Offering For $3B

Larry Page wants some more money. Around$3B more infact. The new CEO is looking into the corporate bond markets for moolah, for the first time in the company’s history.

Why does Google need more money?

There was a 54% spike in corporate spending last quarter. The company also expects to make ‘significant capital expenditures.’ (Just to give you a perspective, Google bought 48 companies last year).

The Mountain View, California-based Search giant has also been on a hiring spree. On a worldwide basis, Google employed 26,316 full-time employees as of March 31, 2011, up from 24,400 full-time employees as of December 31, 2010. Not only that, the company also recently increased base pay for its employers by 10%.

The company is however rather cash-rich. As of March 31, 2011, it sat on a pool of cash, cash equivalents, and marketable securities worth $36.7 billion.

Details of the public offering

The pricing of its public offering stands at $3B aggregate principal amount of notes. This is split into $1B of notes at 1.25% due 2014, $1B of notes at 2.125% due 2016 and $1B of notes at 3.625% due 2021. The company issued a press release to this effect, and filed a subsequent Form 8-K (Current Report) with the Securities and Exchange Commission.

Moody’s Investor Service assigned the offering an AA2 rating.

Google expects to receive net proceeds from this offering of approximately $2.97B, after deducting underwriting discounts and estimated offering expenses. The company intends to use the net proceeds to repay outstanding commercial paper and for general corporate purposes, it says.